Well, it's "kiddie in sweetshop" time for me.
Maybe I'm being way premature, and maybe the global economy is falling off a cliff, but I see lots of apparent bargains out there.
There is a fascinating piece on excess cash sloshing around the system, suggesting to me that at some point stocks will be bought heavily:
...Custodian banks are hurting because it’s near impossible for them to return even a zero rate on large deposits of cash. There’s simply not enough Treasury bills out there, which is why they are trading at negative rates causing all sorts of dysfunction at money market funds.
It’s natural, therefore, that they would eventually start charging for a service that is costing them — as Bank of New York Mellon announced it would start doing on Thursday...
...Which suggests the next obvious step for the Fed is to declare an official negative interest rate policy, or a national imposed tax on deposits of a certain sum.
It’s what Switzerland, by the way, has also heavily hinting it will do if the Swiss franc remains “massively overvalued”.
And yes, if you think that’s effectively nothing more than a wealth tax on the extremely rich, you’d be extremely right. Unfortunately, it might just be the incentive needed to get hoarded cash circulating through the economy once again...
This morning, I have bought:
- Encore @ 43p [75p's worth of assets + upside, I reckon]
- Braemar Shipping Services (LON:BMS) @ 400p [7% yield - BMS hardly suffered during the GFC, despite trade freeze up, so I reckon resilient]
- JPMorgan Indian Investment Trust (LON:JII) @ 377.5p - lowest level since May 2010 - and has the Indian economy gone backwards in that time?
All additions to existing holdings. I have my eye on a few others (Vodafone (LON:VOD) , Rit Capital Partners (LON:RCP) , Medusa Mining (LON:MML) , HG Capital Trust (LON:HGT) ), but they're not quite cheap enough yet...
I would be buying more Halfords (LON:HFD) (7.5% yield that I reckon is sustainable & likely to grow - I'll be writing an article in due course) and Aminex (LON:AEX) but added a little prematurely (with the benefit of hindsight) on Wednesday. The aggregate yield on my high-yield sub-portfolio is now 6.9%.
After my spending binge, cash now stands at 11% of my porty - but it should soon receive a boost when the sale of Caledon completes.
So, what are you buying?
Filed Under: Portfolio Management,
The author may hold shares in this company, all opinions are his own and you should check any statements that appear factual and not rely on them before making an investment decision. The author is NOT a qualified analyst nor authorised to give investment advice. Whilst the author is a director of ShareSoc, all views expressed are entirely his own and not necessarily those of ShareSoc.